Asian Journal of Agricultural Sciences 3(6): 492-499, 2011
ISSN:2041-3890
© Maxwell Scientific Organization, 20011
Submitted: August 26, 2011
Accepted: October 15, 2011
Published: November 15, 2011
An Analysis of the Broiler Supply Chain in Swaziland:
A Case Study of the Manzini Region
Micah B. Masuku
Department of Agricultural Economics and Management, University of Swaziland,
Private Bag Luyengo, Luyengo M205, Swaziland
Abstract: This study analyses survey data gathered in 2009 from contract and non-contract broiler farmers in
the Manzini region of Swaziland. A descriptive research design was used in the study and data were collected
using personal interviews. The results show that the same type of inputs were used in both production systems
with the only difference being the quantity of inputs used in each system. The results also revealed that
productivity is higher for contract farmers as they produce birds with an average weight of 1.8 kg in 5 weeks
and also produce an average of 34,500 birds per batch. The results further indicated that consumers buy live
birds mostly from non-contract farmers and buy processed birds from contracted farmers. Consumers pay more
for a bird produced through the contract system than a bird produced through the non-contract system. On
average birds produced under non-contract system cost consumers E28.00 whilst birds produced under the
contract system are sold on weight basis and costs the consumers E20.99 per kg. Thus on average consumers
pay E32.50 for a whole bird produced under the contract system. The cost of producing one bird is high with
non-contract farmers than is for contract farmers. With increasing competition and changes occurring in
markets, producers need to understand and improve the effectiveness and efficiency of the broiler supply chain.
This will often require a combination of firm-level actions as well as improvements in the entire value-chain.
There is also a need for political will by government to protect farmers by promoting competition through
enacting competition legislations and allow transparency within the value chain.
Key words: Broiler chickens analysis, poultry contracts, supply chain
INTRODUCTION
in a number of homesteads is chicken (Callus domesticus)
species. Many farmers keep chickens for meat
consumption purposes. This has been more advantageous
because it has been easy to manage them in terms of
feeding and treatment. Chickens were exposed to
scavenging systems for feed and received little
supplementary feed. There was no provision for housing,
thus they were characterised by low input and low output.
According to Masimula (2004), surveys indicated that
91% of families in rural areas of Swaziland mostly raise
chickens.
Poultry activities in Swaziland are carried out by
most farming communities. These poultry farmers are
found in both Swazi Nation Land (SNL) and Title Deed
Land (TDL). They include smallholders to medium and
large producers. In the past years medium and large scale
producers were found only on TDL, but with the
establishment of the Swazi Poultry Processors (SPP) in
Matsapha industrial area, these categories are also found
on Swazi Nation Land (Masimula, 2004). In the early
1990s, local farmers started to become aware of the
viability and sustainability of utilizing agricultural land
for poultry production specifically on land unsuitable for
crop farming. This resulted in the creation of a forum
where both large and small producers of eggs, live
chickens and slaughtered birds could meet. These
Approximately 80% of the population of Swaziland
is found on the Swazi Nation Land (SNL), where
agricultural practices are prominent. Agriculture
contributed 11.9% to the gross domestic product in 2008,
while the agricultural activities conducted on the SNL
contribute about 5% of the gross domestic product of the
country and about 70% of the Swazi people depend on
agriculture as a source of income and employment
(Thompson, 2010).
Commercial poultry in Swaziland started in the late
1960s with most poultry farmers engaged in egg
production and it was mostly concentrated in few selected
rural development areas (RDAs) (Dube, 1991). The
importance of poultry was over the years emphasized on
egg production. This was made possible by the United
Nations International Children Emergency Fund
(UNICEF), which was providing egg producers with
battery-cages. In the seventies the country faced an
evolution from egg production to broiler production.
Broilers refer to a group of birds reared for meat as a
source of food. Some of the birds that are common in the
domestic exercise are chickens, turkeys, ducks, geese and
pigeons. They are only refereed to as poultry when they
are domesticated. The most common type of poultry kept
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producers realized the need for an official body to
represent their interests hence the Swaziland Poultry
Producers Association (SPPA) was formed (Masimula,
2004; Mabila, 2006).
Local poultry farmers face unfair competition from
imported and often dumped poultry products from other
countries, such as South Africa. Swaziland is
unfortunately quite vulnerable in this respect because of
the big gap that exists between levels of local production
and that of the retail trade. The consumer market is
dominated by an organized supply sector, closely linked
to a developed economy in South Africa and equipped
with all the latest marketing, advertising and promotional
skills. The poultry sector in Swaziland is ready and
capable of supplying a major part of the demand for eggs
and meat. However the development of this potential
depends heavily on correction of the present market
distortion, which need to be addressed (Freeman, 1997;
Robinson, 1998).
handle birds in large flocks. Broilers are being produced
worldwide and trials have been implemented to produce
the best quality meat at a very short space of time. It is
predicted that the consumption of poultry meat will
continue to increase in the future in form of new
processed poultry products. Genetic improvement in
poultry has played a major role in the quality of meat
produced. This also led to the production of a meat type
chicken that weighed over 2 kg at seven weeks of age
having been fed on only 4 kg of a balanced diet. The main
principle that is used when rearing broilers states that a
producer should keep birds of the same age on the same
site so that they are ready for sale at the same time. They
are ready to be slaughted at eight weeks of age. In a year,
5 batches of broilers can be raised because an allowance
of two weeks has to be allowed between any two batches
through out the year. This study examines the broiler
supply chain with a view of conducting the economic
analysis of the supply chain.
Importance of poultry farming: Poultry farming is an
important way of improving income and employment for
the rural poor population in developing countries. Poultry
production is also a strategic way of addressing animal
protein intake shortage in human nutrition because of its
high productiveness, fast growth rate, short generation
interval and unparallel competence in nutrient
transformation to high quality animal protein. Most
countries have government departments responsible for
the development of poultry. The effectiveness of such
departments varies, but the main hindrance is usually
limited and lack of trained administrators, researchers and
extension workers (Stewart and Abbott, 1981).
According to Abbott (1965) developing countries
have a growing trade deficit in products, and now Africa
accounts for thirty percent of the world's annual poultry
imports which makes adequate research a necessity for
development. He also argues that small-scale farmers
make up the bulk of all producers and that makes them
major contributors in poultry development in Africa.
Poultry for both small and large-scale producers should be
encouraged for several reasons in developing countries.
According to Vilakati (2000), poultry production has to be
encouraged because of nutritional, social and economic
reasons. Eggs and poultry are an excellent source of
proteins and energy. Poultry production can be a way of
improving a lot of low income groups in rural areas, thus
improving the living standards of the individuals.
Production of broilers has shown to be an important
venture, thus new technology has been and is still
introduced in developed and developing countries.
Mountney et al. (1988) commented that technological
advances in broiler production developed in the United
States and other countries in the last 40 years have been
rapidly applied worldwide and have made it possible to
Vertical poultry production contracts: Contract in
broiler production may vary from country to country and
the nature of the contractor. Contracts in broiler
production mean agreements between farmers and
integrators that specify conditions of producing and
marketing broilers. There are mainly two types of
contracts and these are production and marketing
contracts (Scott, 1984; Little and Watts, 1994). With
production contracts the quality and quantity of
production inputs are determined and supplied by the
contracting firm. The compensation that the grower
receives for services is also decided by the contractor.
Marketing contract refers to an agreement between a
contractor and a grower that sets a price and the market
outlet before the broilers are ready to be marketed. Most
management decisions remain the responsibility of the
grower. In marketing contracts, only the price risk is
shared whereas in production contracts, both production
and price risks are shared by the grower and contractor.
The contractor may have more control over production
decisions depending on the type of production contract
(Little and Watts, 1994).
According to Cunningham (2005) vertical production
means that all or most production aspects are owned and
controlled by an individual company called an integrator.
The integrator provides the contractee with chicks, feed,
medication and technical advisors to supervise farm
production. A contract broiler farmer has to prepare his
houses and equipment to meet the specifications
recommended by the broiler integrator with which he is
planning to contract (Laura, 1994). It is important that the
prospective farmer gets a signed contract before buying,
constructing, or renovating a poultry farm. Otherwise, he
may spend a large amount of money and end up with no
company interested in placing chicks in his facilities.
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The clean side includes the evisceration, packing, dispatch
and stores department. The Maintenance department is
where they fix and maintain damaged machineries needed
for processing.
Companies do not place chickens in houses just because
they are available. Companies try to screen prospective
producers closely to determine whether they will be good
business partners. Each company wants an honest,
dependable, hard working person or family who is well
respected within the community. Companies invest large
amounts of money in the chickens, feed and field service
workers.
Under the contract system, the company retains
ownership of the birds and expects producers to grow
their flocks under very specific management programmes.
Company field representatives normally visit farms
weekly to assist with management, but they may do so
more often if necessary. Vertical integration reduces
production costs through coordinating and professionally
managing each production stage. This approach not only
improves cost efficiency, but also permits the production
of more uniform birds in large volumes necessary to
successfully compete in the market. In this system, the
integrator is responsible for all processing facilities,
processing labour and salaries, and marketing activities
crucial to the success of the poultry business. Processing
and marketing are very specialized and require
considerable expertise and experience for success. For
this system to work effectively, integrators and producers
make significant contributions to the processed depend on
each other (Cunningham, 2005).
SPP issues contracts to broiler farmers under the
following conditions:
C
C
C
C
C
The farmer must prepare the poultry house that can
accommodate at least 5000 chickens
A farmer has to write a formal letter to SPP
indicating his/her interest in working with the
company;
The farmer must be within a radius of 30 km from
the company to minimize costs of transport and the
area must be accessible for ease of transportation
The house plan must provide suitable environmental
conditions for the chickens, for example the floor
must be cemented, there must be curtains to prevent
rain and also allow ventilation, there must be enough
equipment for feeding
After the completion of the structure, an inspector
must be called to inspect the structure if it is ideal for
rearing chickens
If the poultry house is found to be in the right
condition then the farmer is allowed to join the contract
growers and SPP provides the following: day old chicks.
These chicks are from the National Chicks, which is the
company's sister company; feed and medication for the
chicks through Feed Master, Crane Feeds and or Arrow
Feeds. Feed and vaccines are provided until the chickens
become 35 days old; and a supervisor who does regular
visits to the broiler growers.
When the chickens are ready for slaughter at 35 days
they are collected from the farm, and the farmer is paid
according to the weight of the chickens, but the company
deducts the costs of chicks supplied, cost of feed and
medication. The farmer has to provide security against
thieves and predators. The farmer should also practice
good management practices. However if the chickens die
because of a disease outbreak the expenses are shared
between the farmer and the company. The company
provides the farmer with an allowable mortality rate of
5%, but if the mortality rate is higher than this, the farmer
has to justify the cause.
Swaziland Poultry Processors (SPP) uses contract
prices with her contract growers, while the contractor
advances the cost of growing stock, feeds and veterinary
supplies and services, these are later charged in full to the
contract grower at the time of harvest and sale of output.
In essence, growing stock and feeds are provided by the
SPP on credit. The stock used and feed consumed are, in
fact, evaluated at prevailing market prices, with a mark-up
imposed for relevant charges (for example, costs of
Contractors (Swaziland Poultry Processors (SPP)):
The Swaziland Poultry Processors (SPP) is a processing
company that deals with the processing of birds into
various packs. This company was formed by Insika
Yemaswati after the loss of market for live birds in 1999.
SPP is now the largest chicken abattoir in Swaziland, it is
situated in Matsapha Industrial site. On average it
slaughters 20,000 chickens a day. It started as a small
company with a staff of about 70 people who were
slaughtering 5000-8000 chickens a day. Lately its
production has greatly increased to 300 workers and
20,000 chickens slaughtered a day. They produce various
products which give a wide range of choice to customers
(Ndlandla, 2009).
Ndlandla further stated that, the company is working
hand in hand with contract growers and Feed Master (a
feed mill company based in Matsapha. The chickens are
grown up to 35 days, after that they are ready for
slaughtering. Feed Master sells to contract growers feed
and vaccines to control diseases on credit.
The SPP is divided into three departments, the dirty
side, the clean side and the maintenance department. The
dirty side is where the live birds are received as they come
from the farmers, slaughtered and dressed. The way each
department is built is meant to serve its purpose, which is
different from the other departments. The separation of
heads and feets from the chicken is done at the dirty side.
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transport to the farm, cost of stock or feeds supplied on
credit). Contract prices are more suitable when close
supervision is not possible, as it reduces the incentives to
divert integrator’s inputs to other uses.
harvesting equipment, and feed in the case of broiler
production) and make major decisions about production
systems, spraying and harvesting schedule. Contract
farming is the most obvious example of how family
farmers are industrial field workers, stripped their
managerial decision making powers and left with only
their nominal independence (Vogeler, 1996).
Advantages of contract farming: According to Kunkel
et al. (2005) there are several potential advantages for
producers who consider production contracts. The
contracts may provide a more s income for the producer
by reducing traditional marketing risks. The contracts may
allow a producer to benefit from technical advice,
managerial expertise and access to technological advances
provided by the contractor. An agricultural production
contract may provide the producer with a guaranteed
market provided that the commodities are produced in
accordance with the contract. Finally, such contracts may
allow a producer to increase the volume of his or her
business with limited capital, since the contractor supplies
the necessary production inputs. However, by entering
into production contract that establishes a formula for
compensation, the producer may lose the potential for
increased profits due to market conditions. Ruthenberg
and Jahnke (1985) argue that there is a rapid production
increase by mobilizing smallholder production
opportunities, mobilization of entrepreneurial talent on
everyone, including smallholders farmers.
According to Vogeler (1996), from the contractor's
perspective, production contracts may provide an orderly
flow of uniform commodities in order to allow the
contractor to control production costs and such contracts
to better respond to changing market conditions.
Contracts give agribusinesses the advantage of treating
farmers as employees without paying them as employees.
Furthermore the pseudo independence status of farmers
motivates them to work even harder than hired
employees.
Supply chain analysis: A supply chain is the series of
interlinking steps that determine the nature, character and
value of a product at the time of receipt by the end
consumer (Peterson et al., 2005).
Supply chain management (SCM) comprises the
management of five flows between departments and or
organizations: materials (the raw materials and
components to produce a product), products (finished
goods), services (either to support the product or stand
alone services), information (to recognize and satisfy
demand), and cash (the supply chain impacts the speed
and efficiency of cash flow). There are four overriding
concepts that are applied in the efficient execution of
supply chain management: linkage (the tying together of
processes, practices, and information), velocity
(increasing asset utilization), reliability (meeting
commitments), and flexibility (responding to changes in
customer needs). These flows and concepts combine in a
variety of ways to produce of multitude of supply chains
that support different product characteristics, market
demands, product life cycles, and geographic markets.
METHODOLOGY
Research design: The study utilized a descriptive
research design applying a quantitative and qualitative
approach. The research used primary data which were
gathered in 2009 through a structured questionnaire using
interviews.
Disadvantages of contract farming: According to
Vogeler (1996) the independent management of farms is
critical to the concept of family farms. To protect
themselves against widely fluctuating incomes and the
inability to get credit from banks, many farmers engage in
contract farming. When farmers sign contracts with
processing companies, they can retain the illusion of
independence because they are self employed but they
effectively become employees of the companies. Kunkel
et al. (2005) also adds that since such contracts are often
very specific in their requirements and limiting the
producer's interest in the commodities produced, the
producer may become a mere provider of production
services for a fee.
Contracted farmers provide land and labour and make
low-order decisions, while the companies provide
everything else (seeds, fertilizer and usually the
Subject selection and sample size: The target population
for the study was contracted and non-contracted broiler
farmers in the Manzini region of Swaziland. Non-contract
farmers are independent farmers who are rearing broiler
birds and sell them in the open market. Contracted
farmers are those who have formal agreements with the
Swaziland Poultry Processors (SPP), where the later
supply day old chicks and inputs on credit to the farmers,
who later supply broilers to SPP. A purposive sample of
fourteen (14) farmers under contract broiler farming and
twenty eight (28) farmers under non-contract broiler
farming in the Manzini region was used in the study.
Data collection and analysis: Data were analysed using
descriptive statistics. The Statistical Package for Social
Sciences (SPSS) version 10 was used to analyse the data.
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Table 1: Demographic characteristics of the farmers
Characteristics
Males
Females
Number of farmers who have reached primary school
Number of farmers who have reached secondary school
Number of farmers who have reached high school
Number of farmers with Technical education
Number of farmers with tertiary education
Proportion of farmers who are on Swazi nation land
Proportion of farmers who are on Title deed land
Proportion of farmers who are part time poultry producers
Proportion of farmers who are in livestock or crop production
Frequency
24
18
1
6
4
25
6
30
12
29
29
RESULTS AND DISCUSSION
Percentage
57.1
42.9
2.4
14.3
9.5
59.5
14.3
71.4
28.6
69.0
69.0
machines are accessed from hardware shops in South
Africa. Automatic machines include feeder tanks, feeding
lines, water tanks and drinking lines. The automatic
machines are common with large scale producers and this
is because large scale broiler farmers keep an average of
64,000 birds per batch. Therefore, the automatic machines
are used to increase the efficiency of the farms and to
enhance productivity.
Broiler farmers access feed inputs from feed
processing firms within the country. These firms include
Feed Master, Arrow feeds and Crane feeds. Feed is
produced in three forms, which is starter mash, grower
mash, and finisher mash. Farmers purchase the feed from
the firm sites or from the firms’ depots found in almost all
over the country. Large scale producers buy feed in large
quantities and the feed producing firms transport the feed
to the farm sites for these farmers. Upon arrival on the
farm the feed is offloaded into storage tanks where it is
stored for the duration of the feeding period. Farmers who
use automatic feeders connect the feed storage tanks to
the feeding lines which have automatic feeding system.
Demographics of poultry farmers: The results in
Table 1 show the demographics of broiler farmers. The
results indicate that broiler farmers in the Manzini region
have on average an experience of six years in the broiler
industry. This implies that the farmers are experienced in
the field although a large number of them had the least
experience and the most experienced farmers had one
year and eighteen years respectively. The results further
show that broiler farmers in the Manzini region were 52
years of age on average with a majority of them aged
between 50 and 59 years. This indicates that most of the
farmers that the farmers ventured into broiler production
just before retirement or at retirement as most of them
indicated that they had been employed before entering
into broiler farming. The broiler industry is mostly
dominated by men as the results show that 57.1% of the
farmers were men and 42.9% were women and most
(69%) were part-time farmers.
Description of the poultry industry supply chain:
The inputs side: The broiler industry supply chain begins
with the supply of production inputs. The production
inputs used in the broiler industry differ in terms of their
use in the farm in terms of their costs, in terms of their
significance in the production of broilers and in terms of
their frequency of being used in the production of broilers.
The inputs needed in broiler production include chicks,
medication, and building material, feeding and drinking
utensils, lights, heating and cooling machines. These
inputs are accessed from the local and international
retailers such as Kharafa trading company for the drinkers
and feeders. The prices for these equipment range from
E40.00 to E60.00 depending on the size of the feeder or
drinker as they come in different sizes.
The prices also differ from one trader to the other as
the equipment is accessed from different retailers which
include Kharafa, TUMS general suppliers and some other
hardware shops. The large-scale producers mainly use
automated equipment such as automatic feeders and
drinkers which cost from a range of E50, 000 to E150,
000 per feeder and drinker system. The automatic
Supply of day old chicks: The National Chicks is a firm
involved in the breeding and selling of one day od chicks.
The firm sells chicks to all broiler farmers country wide.
Among the shareholders of National Chicks are farmers
with contracts to supply SPP. National Chicks has been
for many years the only supplier of chicks in the country.
She has been without competition until Kharafa trading
company in Manzini ventured into the industry. Currently
there are many other suppliers of imported one day old
chicks. National Chicks is selling her chicks at E4.10 a
chick to the general public, but they are sold at E3.80 to
contract farmers.
Kharafa is currently importing breeding eggs from
South Africa and produce day old chicks. She then sells
the day old chicks at E4.05 to all broiler farmers. Kharafa
has depots country wide to enable all broiler farmers to
access her products. Currently National Chicks and
Kharafa are the only companies providing farmers with
chicks in the Manzini region. These two suppliers of
chicks also sell medication for the broilers.
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Table 2: Production of broilers under contract
No of birds Kept per
Frequency
4000-8000
5
8001-12000
1
16001-20000
1
32001-36000
1
48001-52000
1
56001-60000
1
60001-64000
2
> 64001
1
Total
13
Table 3: Production of broilers under non-contract
No of birds per Batch
Frequency
200-600
9
601-1000
8
1001-1400
1
1401-1800
3
1801-2200
4
>2201
3
Total
28
Percentage
38.5
7.7
7.7
7.7
7.7
7.7
15.4
7.7
100.0
Percentage
32.1
28.6
3.6
10.7
14.3
10.7
100.0
the number of birds each contracted farmer produce per
batch for the farmers producing above 50, 000 chickens a
batch. The contractor can at some point instruct the
farmer to produce less than the capacity the farm can
produce. It is on such cases that contracted farmers
become less profitable than their potential.
The production side: The production sector is divided
into contract and non-contract producers. Contract
producers are broiler farmers who are contracted by an
integrator or contractor, the Swaziland Poultry Processors
(SPP). Contract farmers are those who produce for the
contractor and it is the duty of the contractor to market the
chickens produced. Non-contract farmers are those who
produce and sell their birds on their own and they operate
freely in the market. They do not have a permanent
market and their production is controlled by the available
demand of poultry in the surrounding markets. The major
markets for non-contract farmers are restaurants, the
National Agricultural Marketing Board (Namboard), and
butcheries. Non-contract farmers differ from contract
farmers in that contract farmers produce for SPP, while
those contracted by Namboard are on quasi contract
arrangement. SPP supply her contract farmers with
production inputs and the farmers manage the birds to
maturity. After maturity the SPP collects all the chickens
from the farms and process them for further marketing.
Farmers only realize profits after the contractor has
deducted the cost of inputs and transport. On the contrary,
non-contract farmers produce the birds at their own
expense and buy all the production inputs and further
have to find markets by themselves.
Non-contract production process: Birds produced under
the non-contract system of production mature from five to
eight weeks. On average non-contract farmers pay an
amount E15.40 to raise one bird to maturity. The range of
raising a bird by non-contract farmers is from E13.50 to
E18.20. The difference between the ranges is brought
about by factors that include farmer's location, which
tends to increase transaction costs. Some farmers live far
from the sources of inputs, therefore bringing the inputs
to their farms raises the costs of the inputs. Non-contract
farmers grow varying numbers of birds per batch thus
widening the range. After production the birds are sold as
live birds to consumers and some birds are sold to
retailers mostly restaurants.
Non-contract farmers have a stocking rate that ranges
from 200 to 22000 birds per batch. They produce less than
contracted farmers because they have poor access to the
formal markets. The only non-contract farmers to produce
five thousand birds upwards are the ones who have access
to permanent markets or have access to the formal market
structures. In the Manzini region it is Valley Farm,
Njanja, and Mlondi Farm who have such privileges
among the non-contract farmers. Valley Farm has
accessed the country's retail markets equally with SPP
except that she can not compete with SPP in terms of
quantities being sold. Njanja and Mlondi have vertically
integrated the supply chain for non-contract growers
through a quasi-contract with the Umbutfo Swaziland
Defense Force (USDF).
According to the results in Table 3, in the noncontract system 17 farmers produce birds within the range
of 200 to 1,000 birds per batch. The only non-contract
farmer who produces above ten thousand (10,000) birds
is Valley Farm who produces 22,000 birds per batch.
Valley farm is a well established abattoir at Sidvokodvo.
She produces and sells directly to the well established
markets in the country. She has also improved her
products to be similar to those produced by the country's
sole contractor (SPP).
Contract production process: For contract farmers the
birds stay for a period of five to six weeks on the farm
before they proceed for processing. At this age the birds
are matured enough to be consumed. To produce one bird,
it cost contract farmers E13.50 on average. The range for
raising one broiler chicken by contract farmers is from
E13.22 to E13.69. The range depends on the size of the
batch. Farmers keeping more birds per batch have less
cost per bird than farmers who keep fewer birds per batch
because of economies of scale.
Contract farmers are more productive as their
stocking rate per batch is high. They produce from 4800
birds per batch to 100,000 birds per batch, but with more
farmers producing within the range of 4000 to 8000 birds
per batch (Table 2). The reason for this could be that the
contractor requires that a farmer keeps a minimum of
5000 birds to qualify to be under contract production.
Some of the contract farmers produce from 52,000
broilers to 100,000 birds per batch. The contractor limits
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Feed merchants (crane, feeds,
feed master, and arrow feeds)
Chick breeder (national chicks)
Boiler farms
Non-contract farmers
(Live and processed birds)
Contract
farmers
Poultry
processor (SPP)
Distributers
(AD enterprices)
Super markets
Individual
retailers
Caterers
Retail
butcheries
Consumers
Fig. 1: Supply chain for broilers
Production efficiency of farmers: Non-contracted
farmers are less efficient as compared to contracted
farmers. This is because contract farmers produce larger
birds in a short period of time than does non-contract
farmers. Contract farmers produce birds of 1.8 kg live
weight in five weeks whereas non-contract farmers
produce 1.3 kg live weight birds in the same period of
five weeks. This illustrates that contract farmers are more
productive and efficient compared to non-contract
farmers. About 92.3% of contracted farmers produce
mature birds in five weeks. This means that contract
farmers can produce more batches than non-contract
farmers since their birds are ready for the market at an
earlier age than is for non-contract farmers. Contract
farmers save on feed because their birds reach maturity at
an early age. This therefore, means that farmers are saving
on production costs for the birds as they only provide feed
for five weeks.
and dressed in preparation for consumption. The birds are
processed into various products then packed before they
are sent to retailers for access by consumers.
The marketing side: Most non-contract farmers sell live
birds direct to consumers. Birds sold on live weight basis
to consumers are sold at an average price of E25.00 per
bird. It is only in special cases that some non-contract
farmers who are vertically integrated in the industry
process their birds before reaching the final consumers.
Processed birds are then sold on weight basis per
kilogramme of a processed bird and is sold at E19.50 to
retailers. However, non-contract farmers who process
their birds, sell them at an average price of E27.00.
Contract farmers sell all their birds to their contractor
who also serves as a processor. The birds are sold to the
processor at E9.60 per kg of live weight. Upon arrival to
the processor the birds are weighed in order to establish
the payment to the farmer. The contractor then process the
birds into various products as discussed in the processing
side. At this stage the contractor is adding value to the
chickens, after which the contractor supplies wholesalers
and retailers with resultant products. Some retailers like
SPAR, SCORE, KFC, and SHOPRITE buy the chicken
products directly from the processor, while the other
retailers access the products from the processor’s
distributors, such as AD Enterprises. Individual customers
are not allowed to buy direct from SPP. They can only
The processing side: Some non-contract broiler farmers
sell their broilers as live birds to consumers as illustrated
by Fig. 1 and other birds are sent to the processors for
processing. Most non-contracted farmers skip this stage
of the supply chain except for a few who have vertically
integrated the supply chain for non-contract farmers. The
few non-contract farmers who process their birds follow
the supply chain illustrated by Fig. 1, but also sell others
live. Within the processing stage the birds are slaughtered
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Asian J.Agri. Sci., 3(6):492-499 , 2011
access meat products either from the wholesaler or from
the retailers. When purchasing from the wholesaler,
consumers pay E20.99 for a kilogramme of a whole bird.
Also the retailers who purchase from the wholesaler pay
the same amount as the other consumers.
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CONCLUSION
The study aim-ed at analysing the broiler supply
chain in Swaziland. Based on the findings of the study,
the following conclusions were derived.
The non-contract system though with a minor
recognition in the broiler supply chain, it does have an
impact on the supply chain as farmers on this system
mostly supply their chickens to retailers as well as
restaurants and butcheries. Thus, there is a certain
percentage of the total consumption of broilers that is
produced under the non-contract system. The study
showed that the broiler supply chain, though not well
coordinated meets the needs of consumers through
contract and non-contract production systems.
Contract broiler farmers have a better financial
performance than non-contract farmers. Although noncontract farmers get more returns from selling one bird,
contract farmers achieve high revenue through economies
of scale in production per batch. The study has shown that
even though non-contract farmers realise higher income
per production cycle, however, they have low net margin
per farmer per year.
Policy implications: Due to among other things,
globalisation and market competition at international
levels, the arena of competition and competitive
advantage is moving from individual firms operating on
spot markets towards supply chains and networks using
co-ordination mechanisms. This move towards vertically
linked production means that the structure, conduct and
performance of one firm, affect the other. With increasing
competition and changes occurring in markets, producers
need to understand their supply chain and find innovative
ways to improve their effectiveness and efficiency.
Exploiting the linkages within the value chain offers
pathways to maintain competitive advantage. This will
often require a combination of firm-level actions as well
as improvements in the entire value-chain. There is also
a need for political will by government to protect broiler
farmers by promoting competition through enacting
competition legislations and allow transparency within the
value chain.
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